Passive Residences
“Passive residences require a minimum investment of €600,000, reduced to €400,000 if allocated to the Andorran Housing Fund.”
- Real estate located in Andorran territory.
- Shares in companies established in the country.
- Debt instruments issued by entities or the Andorran public administration.
- Financial products or insurance contracted with local entities.
- Non-remunerated deposits with the Andorran Financial Authority (AFA).
However, the investment is reduced to €400,000 when allocated to the Andorran Housing Fund, a public-private mechanism to promote affordable social housing.
If the investment is in real estate, at least €400,000 must be allocated per unit acquired to prevent speculative purchases of small apartments.
The following amounts must be added:
- €47,500 mandatory deposit with the AFA for the main applicant.
- €9,500 additional for each dependent.
- Administrative fees: €2,500 for the main applicant and €500 per regrouped person.
Active Residences
Regarding active residency, the main changes are:
- Increase of the AFA deposit from €15,000 to €50,000.
- Increase in the minimum ownership percentage in Andorran companies, which must exceed the current 20%.
- Renewal refusals in cases of companies without activity or when the resident does not meet the 183 days of effective residency per year.
- Possibility of AFA deposit exemption for projects related to innovation, the digital economy, and entrepreneurship.
“Permits will not be renewed if the company is inactive or if the resident does not meet the 183 days of effective residency.”
Additionally, the amendment to the Foreign Investment Law was approved, allowing expansion of investments without prior administrative authorization for citizens and residents of countries with a double taxation agreement or economic cooperation agreement with Andorra, such as Spain or France.
New Tax on Foreign Real Estate Investment
Since February 2024, a new tax has been in force that applies to the purchase of real estate in Andorra by:
- Non-resident individuals.
- Individuals who have been residents for less than three years.
- Foreign companies.
- Andorran companies with more than 50% foreign capital.
The tax ranges from 3% to 10%, depending on the number of properties acquired:
- 3% for the first purchase.
- 5% from the second to the fifth.
- 8% from the sixth to the ninth.
- 10% from the tenth onward.
There are exceptions and specific cases that should be analyzed individually.
